The hidden donors financing a negative-advertising campaign slamming Phoenix Councilman Sal DiCiccio could soon be revealed after the state Attorney General’s Office ordered the group to turn over records.

An attorney for the state said the Campaign for Better Neighborhoods, a non-profit behind the anti-DiCiccio ads, must provide numerous financial records and other materials, suggesting it has ignored campaign-finance laws and improperly waded into DiCiccio’s re-election fight.

The group has targeted DiCiccio with negative mailers sent to thousands of voters in his east Phoenix and Ahwatukee Foothills district in recent months.

DiCiccio is in the midst of a heated re-election challenge from insurance executive Karlene Keogh Parks, and early voting in the Aug. 27 primary election began last week.

At issue in the state’s investigation is whether the group, formed by left-leaning political operatives the day after Keogh Parks got into the race, has directly attempted to influence the council election. Officials have suggested that it has violated laws regarding reporting requirements for independent expenditures in elections.

Ken Chapman, chairman of the group and former director of the Maricopa County Democratic Party, contends its issue-advocacy efforts are not aimed at influencing the council election — their mailers don’t directly mention the race or urge residents to vote against DiCiccio — and therefore are not subject to campaign-finance reporting laws.

State law requires corporations to register with the city if they spend $1,000 or more to attempt to influence the outcome of a candidate election. Violators who do not register can face a fine of up to three times the amount of the expenditure. The Campaign for Better Neighborhoods has not registered as an independent-expenditure group or a political committee.

But officials from the offices of state Attorney General Tom Horne and Secretary of State Ken Bennett have said the group is attempting to influence the election. The attorney general’s investigation is ongoing, though its order says the group clearly engaged in “express advocacy.”

“It looks as of now to be a giant smear campaign hidden behind an organization,” said Stephanie Grisham, a spokeswoman for Horne’s office. “It’s one of the more egregious ones I’ve seen come across my desk.”

Chapman said his group will demand a hearing to challenge the order that it turn over its donor list and other records. He said Horne and Bennett, both Republicans, have “abused their power and engaged in partisan politics of the worst kind by expediting an inaccurate finding without any basis in the law in order to rescue a fellow Republican, Sal DiCiccio, in a close election.”

DiCiccio also has been accused of using a non-profit corporation to campaign in the election. Opponents filed a lawsuit recently accusing him of using his group, Citizens Protecting Taxpayers, to promote himself without facing campaign-finance reporting requirements.

His attorney contends the non-profit is only engaged in issue advocacy. A judge threw out the case, suggesting that it had been filed for political purposes and would be more appropriate for an administrative body to vet.

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